This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Delivered on:

13 October 2011 (Original script, may differ from delivered version)

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Thank you. I’m delighted to be here today.

It’s a great honour to address the world’s foremost scientific institution.

John Dalton, Ernest Rutherford, James Chadwick.

Without these distinguished Fellows of the Royal Society, the secrets of nuclear energy would have remained hidden for longer.

So today’s subject is fitting. And I want to thank everyone involved with producing the Society’s report on fuel cycle stewardship.

One of the clearest lessons from the history of nuclear energy is that government, industry and science work best when they work together.

A scientific adviser must speak truth to democratic power without fear. In my view, it makes sense if democratic power then listens.

It is in that spirit that I want to take an open and honest look at the history of nuclear power in Britain.

If we are to retain public support for nuclear as a key part of our future energy mix, as I believe we should, then we have to show that we have learned the lessons from our past mistakes.

And some of those mistakes were not small. Nuclear policy is a runner to be the most expensive failure of post-war British policy-making, and I am aware that this is a crowded and highly-contested field.

We currently have around 6,900 cubic metres of high-level nuclear waste. That’s about enough to fill three Olympic swimming pools. We have enough intermediate-level waste to fill a supertanker, and a lot more low-level waste.

We manage the world’s largest plutonium stocks - more than a hundred tonnes - and they will need guarding for as long as it takes us to convert it and build long-term deep storage. And if we don’t, we will have to guard it for tens of thousands of years.

Half of my department’s budget goes in cleaning up this mess, and it will rise to two thirds next year. That is £2 billion a year, year in and year out, that we are continuing to pay for electricity that was consumed in the fifties, sixties and seventies on a false prospectus.

Yet the total nuclear liabilities that the Nuclear Decommissioning Authority now deal with are estimated to be £49 billion, and I cannot be confident that the figure will not rise again as we discover yet more problems.

Just look at the history of rose-tinted spectacles: the provisions for nuclear decommissioning costs in total were £2 million in 1970. £472 million in 1980. £9.5 billion in 1990. £22.5 billion in 2000. And now £53.7 billion.

It seems to me essential reassurance to tax-payers and energy consumers that I and my successors can honestly say “This will never happen again”.

Despite this history, I believe that nuclear electricity can and should play a part in our energy future provided that new nuclear is built without public subsidy. And it is precisely because of that post-dated bill from past nuclear mistakes that I reiterate with exceptional feeling “without public subsidy”.

The reason is the same as so many other environmentally-minded people now give. Nuclear energy has risks, but we face the greater risk of accelerating climate change if we do not embark on another generation of nuclear power. Time is running out. Nuclear can be a vital and affordable means of providing low carbon electricity.

In tough times, I am acutely aware of the stresses and strains on household budgets, and I want British electricity consumers to have the best possible deal.

Of the three large scale low carbon technologies, the costs estimated by Arup are as follows. Offshore wind is assessed at £130 per megawatt hour, gas with carbon capture at £95 per megawatt hour, and nuclear at £66 per megawatt hour. These figures take account of waste and decommissioning costs, so nuclear should still be the cheapest low carbon source of electricity.

And costs matter when a quarter of our power plants will close by the end of the decade.

By 2023, all but one of our current fleet of reactors are scheduled to close, taking with them nearly 18 per cent of our electricity supply. We have to find 20 gigawatts of generating capacity and £110 billion of investment in the electricity market. That replacement cycle is double the normal level of energy investment.

Gas is an option, even for the long term, with carbon capture and storage. But fossil fuel price volatility has increased, and world gas prices have risen by a 29 per cent in a year. It is surely not in our national interest to rely even more heavily than necessary on fossil fuels from volatile parts of the world.

Renewables are a family of technologies which will last forever, with less environmental impact. They should be a growing part of our supply, as they are in other countries. But thanks to decades of under-investment by previous governments, the technologies are still relatively young. Uncertainties on some really promising technologies like wave and tidal stream are still considerable, and costs remain high.

Nuclear too has uncertainties, as the cancellation of new programmes in Japan and Italy and the phase out of existing reactors in Germany all show.

Our examination of the lessons of Fukushima from Dr Mike Weightman is reassuring about our regulatory regime and about safety, but the economics of new nuclear are still untested. The industry still has to prove that it can build these enormous investments on time and to budget.

For all these reasons, our approach is to bring forward a broad portfolio of low carbon technologies: renewables, carbon capture and nuclear. It is the only sensible way to handle risk, as we all know when we run our own pension funds.

However attractive one share may look today, it is rash to put all your money into just one stock. Governments should not bet the farm.

The past

So with my eyes open, and with a nervous look at the past, I say that we need nuclear to be a part of our energy mix in the future.

But it is essential to learn from that past. As George J. Stigler said, history is a good teacher but there are inattentive pupils.

So today, I want to look at Britain’s nuclear past to draw out those lessons.

In many ways, Britain is the birthplace of nuclear energy. Like many first-time parents, we tried everything and we did so with enthusiasm.

The world’s first commercial nuclear power station, Calder Hall in Cumbria, closed in 2003. It was opened by Her Majesty the Queen nearly half a century earlier.

Life was very different in 1956, when Calder Hall was switched on.

Rationing had only just ended. There were no motorways. Sputnik was but a sketch on a drawing board. Lasers and cash machines were still years away.

The industry was in its formative years. Our attitudes to risk were different. The environment was not yet a subject of public concern.

When Calder Hall opened, a Health Minister rejected calls for a government campaign against smoking. Seat belts were optional extras on a few imported cars.

And our attitudes to spending were different, too. Britain was still effectively on a wartime footing: and when it came to strategic national decisions, the relationship between government, parliament and the people was still conducted on wartime terms. Secrecy. We know best. Don’t tell those who don’t need to know.

Following the great smog in London, and the Suez crisis, an independent nuclear programme was held to be important for the nation’s security and prosperity.

This was the setting in which Britain’s nuclear policy was designed. It was a different time. And decisions taken in the 1950s directly affected the liabilities that we are paying for today.

Of course, we have been granted the gift of hindsight, and the benefit of reflection.

As we give the green light to the next generation of nuclear power stations, we must use those precious insights. So let me turn to the lessons we have learned.

First lesson, simple and clear objectives matter. In the early days, we could not decide between guns and butter.

Nuclear technology was given the task of delivering two national priorities - energy for the masses, and plutonium for the military - without proper economic or democratic scrutiny. The reactor used at Calder Hall was chosen firstly for plutonium production; electricity generation was a side effect.

Born out of military requirements but serving civilian needs, the new industry was torn in two directions. Confused objectives led to confused design decisions - and a high legacy cost.

In the United States, by contrast, there was a competition for the most efficient and safe reactor design to produce electricity. A simple objective with a cost-effective result. The pressurised water reactor.

The second lesson is avoid conflicts of interest.

For the first two decades of nuclear energy, the UK Atomic Energy Authority was responsible for both promoting and researching nuclear energy.

The Government’s official adviser on nuclear policy was an organisation solely devoted to nuclear energy. Gardeners like gardening, researchers want more research, and the UKAEA wanted more nuclear energy using their own designs.

That meant advice to Ministers was not always impartial. Designs were chosen and delivered without proper oversight. There was no sceptical, commercial eye for either operating or decommissioning costs.

The third lesson is keep it simple. Such is the extraordinary inventiveness of the British scientific community - to which I pay fulsome tribute here - that all eleven Magnox power stations were built to different specifications. Even their fuel elements were different sizes.

From an energy policy point of view, we needed several good workaday Marks and Spencer suits. Instead, every reactor was bespoke from Savile Row.

The second fleet of advanced gas-cooled reactors were built to a design that almost no-one else used. They did not deliver on budget or on time.

The fourth lesson is that we forgot about our children. About their future.

The regulatory systems were simply not geared toward long-term protection. In the early days, we didn’t plan for decommissioning or managing radioactive waste. Short-term political or financial decisions were taken, with long-term consequences.

In other countries, a levy on nuclear power went into special funds to deal with decommissioning. Both France and the United States handled the problems much better than us.
In the UK, the money was more free-range than ring-fenced. It was tipped into new projects, in the belief that it would be clawed back from asset sales. Too often, we played double or nothing with public cash.

Which brings me to the fifth issue: we took our eye off the money. The nuclear industry was like a expense account dinner: everybody ordering the most expensive items on the menu, because someone else was paying the bill.

In the early days of nuclear power, cost-effectiveness was not an issue. Decommissioning estimates were often approximate and greatly understated. We bought in to technological promise without exercising due diligence. When the arguments for technology changed, as they did for reprocessing, we did not subject them to proper scrutiny.

Only in the late 1980s did reform bring about the end of a centrally directed energy policy. When nuclear power was held up to the cold hard light of the market, it proved to be uneconomic.

Hidden subsidies and uncertainty over liabilities do not make for an attractive investment environment. Attempted privatisation of existing nuclear plants failed, partly because the true costs of cleaning up were becoming slowly apparent.

And when waste started piling up, we effectively crossed our fingers and hoped that it would all go away. We did not act decisively, while our spent fuel and waste stocks grew.

The future

Never again. Never again. This government is determined not to pay for the present by mortgaging the future. We are determined to do the right thing for the long term.

On governance, regulation and financing, we must show that we have learned the lessons of the past. We will make provision for future costs now, and pay down our decommissioning debt.

We will tackle our nuclear legacy. The work on ponds and silos at Sellafield is proceeding as fast as the space and engineering allows: despite our financial situation, there is no financial constraint on dealing with urgent tasks.

Thanks to the foresight of Patricia Hewitt, the Nuclear Decommissioning Authority is managing radioactive waste at 19 sites across the UK. And my Department has just finished consulting on the long-term management of our plutonium stockpiles, and will publish the results shortly.

Looking to the future, we will prevent a new legacy from building up.

Operators of new nuclear power stations must have secure financing arrangements in place to meet the full costs of decommissioning, and their full share of waste management and disposal costs.

They must submit their plans for approval by the Secretary of State, who will receive advice on the financing from an independent Assurance Board. No more Robert Maxwell style plundering of the public piggybank.

Nor will we fall into the trap of secretly choosing reactor designs. Open competition for the best is our watchword, letting industry and investors assure value for money.

Competition will make the utilities drive a hard bargain with suppliers. No more cost-plus monopolists who just pass on any increase regardless of the effect on consumers.

Regulators are currently carrying out a Generic Design Assessment of new nuclear reactor designs.

A generic assessment means the safety, security and environmental aspects of new reactor designs can be assessed once before applications are made for a whole series of sites. Unlike the old days, when every planning inquiry started from scratch as if another reactor had never been built.

The National Policy Statements on energy also establish that energy infrastructure is needed, so that too does not have to detain a planning application. The Nuclear policy statement identified eight sites which are suitable for new nuclear power stations by the end of 2025.

We will also ensure regulation of the industry is transparent, accountable, proportional and consistent. The industry has acquired a terrible reputation for secrecy, fed by unfortunate incidents like the falsification of MOX data. No more unnecessary secrecy. No more cloak and dagger nonsense. The competent need have no fear of openness, and in my experience the new nuclear industry know that this is the only way to win public trust.

That is why we created the Office for Nuclear Regulation, which is intended to become a new independent statutory body.

It brings together civil nuclear and radioactive transport safety and security regulation in one place. It will house internationally recognised expertise, and will respond quickly and flexibly to current and future regulatory challenges.

And finally, we will continue to encourage investment, research and development - and to help build the skills base needed to support nuclear technology here in Britain. On current plans, total investment in new nuclear will reach some £50 billion.

Each of the reactors planned for the next fleet will deliver investment equivalent to that for the 2012 Olympics. Each plant could create 5,000 construction jobs at peak, and employ a thousand people in operation.

And by the way, there is even some consolation in our unhappy nuclear history. We are developing some world-beating businesses - with expertise in cleaning up old messes.

Conclusion

Nuclear power can play an important future role in our energy security provided there is no public subsidy. We have done everything we can to make sure it is safe, regulated, secure and affordable. Now our partners in the private sector must rise to the challenge and deliver it.

Yes, that means investing. And it means committing to a culture of openness and public trust. Because although we must keep the lights on and the skies clear, there is a higher responsibility here, too.

The decisions made in the early days rubbed against the grain of democracy. They left long-term impacts and heaped costs on future generations.

The decisions we make about energy today will also leave a legacy. Our challenge is to make ensure it is a positive one. No more post-dated bills.

Let me end like this. Sir Winston Churchill, who was half American, once said that the Americans can always be counted upon to do the right thing, when they have exhausted all the other possibilities.

I approach a new generation of nuclear energy in the same spirit. On nuclear policy, we have exhausted the possibilities. We have made pretty much every mistake human ingenuity could devise. And boy, are we British inventive.

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